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So, you want to be your own boss?

Claude SaulnierA blog post by Claude Saulnier - Wandsoft CEO

7th October 2015 

I got the idea for this post after I met a person the other day in early stages of setting up a business. First thing she said was 'I need funding'. To which I replied with my favourite question: "why?"

Why do you want to start your business?

Do you think that the company you work for is not managed the way it should be? Do you think you'd love to drive an Aston Martin? Do you think you have THE idea that will make you the next Steve Jobs. I don't blame you, the Aston Martin is an aspiration here too. I am also passionate about solving a problem for my clients.

As part of the development of Wandsoft, I raised investment after about 2 years in business. I remember the thrill and I was very proud of what I had achieved. Main problem is that my investor and I believed the sales figures that I crafted with our accountant. But they were nowhere near reality. I wasn't a sales person then, and our product was far from finished.

The key point you must remember when you set your business is that the measurement of success is through:
SALES. Funnily enough, you'll have to remember that point throughout the remainder of your venture.

The success of your business relies on your ability of having a positive cashflow. It is as simple as that: "CASHFLOW". What did I just write twice? Cashflow? What does that mean? Cashflow means that you have enough money in the bank at the end of the month to pay the bills, the salaries and the rent (more or less).

When you start, it is likely there will be either "you -on your own-"  or  "you with a business partner".

In this post, I am focusing on "you - on your own-".

At the level of many of you reading this, your chance to succeed will depend on how much savings you have, your expertise, your network, and your idea. Then, the amount of work you put into it. Yes, bad news, setting up a business is a lot of work. Finally, your ability to manage Cashflow. To avoid you scrolling back, I'll repeat it: "Cashflow means that you have enough money in the bank at the end of the month to pay the bills, the salaries and the rent". 

The idea

An idea for a product or a service could be too early, too late, or there may be competition already there. I once heard a guy who wanted to challenge a ticketing website by just improving the look and feel. I am still not convinced that it is enough as a Unique Selling Point (USP).

Talk to people about your idea. In most cases, no one will properly be able to steal your idea. Most of the idea's success is YOU (Danielle Serpico will be proud)! Ask for feedback, and beware of those who tell you "oh, brilliant" just to please you. You think your idea is unique. Get someone to challenge you. It needs to solve a problem. Then again, there are good problems, and bad problems.

Looking at your offering, you can consider the low end market, the middle tier market and the high end market. common sense tell me it will be difficult to tackle the top end with no money since branding will have a place to play.

Investment requirements and Cashflow

One way to start is to think: I have €0 to start. I have €8,000 of savings, which allows me to go without any client for let's say 6 months.

What do I need to start?

If you have no savings and you want to start your own business, let me confirm that it's going to be tough! Grants or not.

A lot will depend on whether you're a product or a service company.

  • With a service company, you can start by selling your own skills. So in theory, there is little investment required.
  • With a product company, you may need stock. And there could be a cost associated.

Investment is not always a good idea in early stage business. I don't think it is a good idea if you have nothing to offer. It is an excuse to postpone getting the sale in the door.

At your level, investment means that people want some return. At least their money back. Treat it like a bank loan. At the multi-million investments it's more like a gamble. Like Amazon that needs cash to kill the traditional book stores.

Then, you need to prepare for a bit of marketing: a website, some business cards, and some time to find clients.  You need a simple website. Don't spend too much time on it as your business will be so different in 6 months' time that if you spend all your money at the start, there won't be any left when revisions are due. Saying that, don't spend too little as it is important to show a good image.

Spend some time to improve your presentation skills (you talking in public). I'll mention Laura Fitzsimons at that stage.

If you have a contact list, budget for a CRM like Wandsoft at around 6 months. You'll be able to track contacts, prepare some forecast and send some email newsletters. Then, when you bill the clients, your invoicing will look clean, and your book keeping will be easier to manage. I know, that's promotion, but hey, are you not enjoying reading this for free?

There are some grants and help available. Positive Economist -Susan HayesCulleton- recently gave an extensive list on the Sunday Business Show. Applying for them will take time, and while they could bring you some money, they are not a measurement of your ability to sell. And as indicated earlier: no sales, no business.

You also need a good mentor to bounce ideas back and forth. A good mentor will ask questions and challenge you. A good mentor will give you food for thought.

One last point

It could be tempting to develop your business while working at your company. It will not work that well. Why would your boss pay for your time finding clients for your venture?

You need to be able to focus your work time on your venture.

Conclusion

Some people want to run their own business but will be completely unable to run it properly. I'd like them to think about it twice.

For the rest, if I haven't managed to put you off, you will be fit for it.

Go for it, it's a wonderful experience.

Claude